New Capital Rules for Stablecoins: CBN Sets N15bn Floor for Dollar Tokens

The Central Bank of Nigeria (CBN) has introduced new regulations for stablecoin operators, requiring a minimum capital requirement of N15 billion, according to multiple sources. The new rules, which come amid a surge in the use of cryptocurrencies in Nigeria, aim to ensure stability in the digital currency market and protect investors. As reported by Nigeria Business on Google News, the CBN’s new capital rules are part of a broader effort to regulate stablecoins, a type of cryptocurrency pegged to traditional currencies like the US dollar. The new rules also require foreign issuers to establish Nigerian entities and secure local licenses, and impose restrictions on peer-to-peer (P2P) naira-dollar conversions, subject to Foreign Exchange (FX) approval. ThisDAYLIVE also reports that the CBN’s new regulations prohibit the use of stablecoins for transactions in the real estate, forex, and commodities markets, among others. The Nigerian government has been grappling with the challenges posed by cryptocurrencies, with the CBN banning banks from facilitating cryptocurrency transactions in February 2021. However, the ban was overturned by a Federal High Court in June 2022. While the new stablecoin regulations mark a significant step towards regulating the digital currency market, they have sparked controversy among some operators, who argue that the N15 billion capital requirement is prohibitively high. The CBN has not said when the facility began operating, or how many operators it expects to meet the new capital requirement. According to THISDAYLIVE, the CBN’s new regulations are expected to come into effect on January 1, 2027.